Success story

Robust cost transparency model for The Foschini Group

The Foschini Group (TFG) is reaping benefits from IT cost transparency, delivered by Keyrus. The leading business data intelligence and digital consultancy implemented a globally-recognised IT financial management (ITFM) solution, MagicOrange, at the retailer three years ago and has partnered with the organisation on its digital transformation journey ever since.

“The Foschini Group is now a long-standing, valued customer who is constantly looking for the latest progressive technology solutions to ensure its competitive advantage and future growth,” says Adam Walker, General Manager of Keyrus. “We hope this partnership will remain as strong for many years into the future.”

JSE-listed TFG is one of SA’s largest retailers and has a diverse portfolio of 29 leading fashion retail brands. It trades through more than 4 200 outlets in 26 countries across five continents. Their brands offer a variety of lifestyle products including clothing, jewelry, cellphones, accessories, cosmetics, sporting apparel, homeware, and furniture, offered both in-store and online.

Absence of cost transparency

The independent chain-store group found that the size and complexity of its business required a particularly robust, granular cost transparency model that would enable it to bill the various areas of the business for the costs directly associated with the services they consumed.

At that stage, TFG had no accurate product and service catalog, and only very limited cost allocation models.

Their cost transparency journey began in 2018, when the retailer was looking to better understand its profitability and costs.

“It was essential for TFG to gain visibility into a more accurate return on capital employed (ROCE) per brand,” explains Marlize van der Westhuizen, Finance Shared Services Manager TFG. “For example, we needed to determine earnings before interest and taxes (EBIT) after shared services cost allocations for each of the brands, rather than having to rely on this metric at a consolidated group level alone.

“Since TFG had no real cost transparency solution and a very limited chargeback model to its various brands, the group clearly required not only the right solution but also the relevant expertise to introduce an effective cost transparency discipline into the enterprise,” she says.

Financial management solution deployed

Financial management of shared services, and specifically ITFM, is one of the key competencies that set Keyrus apart from the competition. Keyrus is a tool-agnostic consultancy that prides itself on selecting the best technology tools to meet clients’ business challenges. It partners with best-in-class technology solutions and, for this implementation, recommended a Gartner-recognised progressive ITFM solution, MagicOrange.

MagicOrange has gained a strong position in the market for ITFM solutions and is recognised as a unique global offering by the independent research by Omdia in October 2021.  

As part of the solution, Keyrus provided consulting services and assisted the retailer to define their ITFM vision as well as develop a roadmap.

The first requirement was to create a complete product and service catalog, which the Keyrus team helped to build from scratch, based on relevant input from the various business areas.

“The existing models for the allocation of costs were very limited and not consistently based on operational drivers,” explains Adam Walker. “This meant that every product and service required a driver to be sourced and incorporated into the MagicOrange model. In addition to the development of these drivers, the implementation included training to ensure employees understood both the nature and fairness of the drivers.”

The first phase focused on the customer’s IT, Logistics, and Facilities Management budget stack, an individual stack that nonetheless had a substantial budget. This core model was delivered in a mere eight weeks, despite being driven from a zero base.

Van der Westhuizen notes that reciprocal charging was properly modeled and catered. Fully loaded and accurate TCOs for products and services across the organisation were also made available.

Finally, scenario modeling was implemented, which enabled multiple scenarios to be loaded, including a range of different budgets, actuals, and forecast data.

Insights into costs

Following this implementation, TFG was able to show accurate profit margins; calculate the total cost of ownership (TCO) of its IT, logistics, and property investments; ensure accurate chargebacks, and utilise its assets more effectively. Many of the previously manual processes are now automated.

The group is benefitting from insights into the costs of delivering IT and services to the group, as well as the ability to accurately assign costs to users of IT services. For the first time, IT is able to properly explain these chargebacks with accurate, detailed reports.

In addition, scenario modeling assists TFG to make both strategic and tactical informed decisions. Rollout to the rest of Head Office service divisions has commenced to include them in a chargeback model. The initial models are being simplified further.

“In the end though, the two biggest game-changers for us were the manner in which Keyrus brought together the cost transparency and a credible recharge model based on consumption of services, as opposed to just a cost allocation model,” says van der Westhuizen. “This further assisted us to optimise costs and calculate ROCE at a brand level.

“The Keyrus team fully delivered on our challenges and exceeded our expectations in the way they understood and cared for our business success,” van der Westhuizen concludes.

“Our team of experts is equipped to enable true digital transformation,” says Greg Guye, CEO at Keyrus. “We aim to move companies away from tedious manual intervention through automation.

“TFG has been a customer of ours since 2018. Following the cost transparency implementation, the scope of work has evolved into an ongoing project and we have been extremely privileged to be TFG's partner of choice in this ongoing business transformation,” concludes Greg Guye.

This article was published by ITWeb


Never miss an insight

Stay updated on the latest articles, events, and more

Your email address is only used to send you the Keyrus newsletter and for commercial prospecting purposes. You can use the link in our emails to opt-out at any time. Learn more about the management of your data and your rights.

Continue reading

Success story

Vector Logistics embraces cloud-powered modern analytic solutions

April 20, 2022

A leading national supply chain specialist now benefits from vastly improved visibility and immediate access to information via self-service following a sophisticated cloud-powered analytics solution delivered by Keyrus.

Success story

Company-wide BI enablement and self-service at a large retailer

March 31, 2022

The leadership of Mr. Price Group, JSE listed retail company and one of the largest retailers in South Africa, had the foresight to invest in the new generation of BI solution and to empower wide business communities to utilise the tool. Keyrus has developed a unique methodology to train business users to extract relevant information for fast, competent decision-making through a self-service.

Press release

Keyrus wins a prestigious Tableau partner award

March 14, 2022

Keyrus, a leading business intelligence and analytics consultancy in South Africa announced that it has been recognised as a 2021 Tableau Partner Award winner for the following category: EMEA Rising Star. This award is a testament to Keyrus’s achievements as a long-term Tableau Partner and dedication to their customer success.

Expert's opinion

How to maximise your BI investment through business-wide enablement

March 3, 2022

Modern business intelligence (BI) technologies have propelled a surge in demand for a company-wide BI enablement as, for the first time, entire business communities are able to obtain answers from company data via self-service. That empowers them to have meaningful conversations about data, leading to more data-driven business culture. Once people throughout the business have visibility into, and take ownership of, the data, the organisation benefits from speed to insight as well as the ability to make rapid, informed decisions.


A proud Industry Insight Sponsor of ITWeb BI & Analytics Summit 2022

February 22, 2022

Enabling a data-driven business in a post-pandemic world is a topic that we at Keyrus feel very strongly about. Our experts will be taking the stage to contribute to this years' BI & Analytics Summit thought leadership and discussion on the most effective ways of driving business-wide enablement and maximizing the value of your data.

Press release

Namibia Breweries appoints Keyrus to implement their Big Data strategy

January 27, 2022

A leading southern African beverage manufacturer has selected Keyrus, a leader in the Data & Digital consultancy space, to partner on a journey of platform and application modernisation.

Expert's opinion

Delivering true value through IT financial transparency

January 25, 2022

In a services focused world, establishing the actual costs of services remains the key focus; greater levels of granularity are often needed to establish these and to deliver true cost transparency. This is especially true in a shared services environment where a range of administrative and support services, such as IT, HR and financial services, are provided to the entire organisation.

Expert's opinion

The future of business intelligence: 6 key trends

November 18, 2021

Business Intelligence (BI) - has undergone significant transformation in recent years and certainly is not being superseded by artificial intelligence. In fact, it has become more efficient and user friendly since moving to the cloud, utilising AI and machine learning, and its embedded implementation. Today's business leaders know that data is a valuable asset that needs to be used effectively to ensure efficient company processes. They require powerful data analysis tools to help them in the decision-making process. Businesses are embracing sophisticated analytics and data science to gain insights and make more informed decisions, the result; turning your BI department into a profit centre.


Live Webinar - Get to Know Tableau with Keyrus

November 10, 2021

Keyrus, in partnership with Tableau, have assisted organisations to transform how they use data to solve complex business problems, and become more data driven organisations, enabling more informed decision making—do you want to do the same? Register for this live webinar to discover the secrets of a self-service approach to visual analytics.

Press release

Keyrus’s mission is to 'make data matter'

October 15, 2021

An international player in consulting and technology as well as a Data and Digital specialist, Keyrus has announced new goals for the market via a renewed and inspiring vision. A vision underpinned by its 25 years of global and 10 years of South African expertise in the data and digital sector.